We strongly recommend that if you are getting a divorce that you have a new last will and testament, power of attorney and advanced directive for health care decisions prepared by an attorney. Although a divorce might automatically revoke certain important legal documents under New Jersey law such as an Advanced Health Care Directive, you still need to identify new individuals to carry out your important intentions if your spouse was named your health care agent under your existing advanced directive. The agent named by you in a general durable power of attorney, which most attorneys recommend that you have in place when preparing your estate planning documents, is not automatically revoked under New Jersey law by virtue of a divorce. If you became incapacitated, would you want your former spouse, by virtue of him or her being named as your agent under a general durable power of attorney, to be in control of your financial affairs?

As a divorce involves the reorganization of a family unit, it also requires an adjustment to your estate plan. A new Will, Power of Attorney and Advanced Health Care Directive gives you the peace of mind that your wishes will be met.

My firm, Drescher & Cheslow, P.A., is well-versed not only in divorce and family law but in estate planning. We would be happy to meet with you to review your estate plan.

More and more family law litigants are turning to alternative dispute resolution processes to resolve their disputes. Among these processes are the collaborative process where both parties hire attorneys and all decisions are made together without involvement of a Judge; mediation, in which the parties, with or without attorneys, attend sessions with a qualified family law mediator to try to reach agreement on their issues; and arbitration, in which the parties agree to select a qualified arbitrator who will conduct a full hearing in which testimony is offered and other evidence is presented after which a binding decision will be issued regarding the issues presented to the arbitrator. All of these alternative processes are usually cheaper than the litigation alternative in our courts and often provide a more expeditious method of resolving disputes.

Recent decisions by the New Jersey courts make it clear that when parties attend mediation and come to an agreement, that agreement must be put into a written document and signed by the parties (and their attorneys, if attorneys are involved) in order to be binding on the parties. Many mediators will draft a Memorandum of Understanding (“MOU”) but will not have the parties sign it at the conclusion of the final mediation session. This gives the parties who have attorneys time to review the MOU with their attorneys when the attorneys do not attend the mediation. However, the cases make it clear that until there is a signed agreement, oral agreements made at a mediation are not binding and the courts cannot consider them as communications made in mediation are considered confidential. So the old saying, “get it in writing”, holds true in these cases.

My office represents family law litigants and can guide you through the best alternatives for you. Whenever appropriate, we encourage the use of alternative dispute resolution processes to resolve your case.

Have additional questions? Feel free to Contact Us for more info!

Since any alimony arrangement made after January 1, 2019, will not be deductible from the gross income of the spouse paying it nor includible in the gross income of the spouse receiving it, an alternate method of gaining a tax benefit to the paying spouse may be to have that spouse transfer 401(k) funds by way of a qualified domestic relations order or IRA funds to the recipient spouse. These funds are tax-sheltered until accessed so the paying spouse never had and will never have to pay income tax on those funds if transferred to the recipient spouse. If the recipient spouse is in a lower income tax bracket than the paying spouse, even though she will pay taxes on the tax-sheltered funds when accessed, it will be at a lower income tax rate.

Of course, there are issues when considering the transfer of tax-sheltered funds in lieu of alimony. The recipient will gain the benefit of future gains that are tax-sheltered until they are accessed. However, if the recipient is under

59 1/2 and needs to access some or all of the funds, the recipient might be responsible to pay a 10{46ef70f40fe9c57c59cc2f14f21b7816c850dc7a4b15fa03188a00f244ceee34} income tax penalty for the funds received.

Nevertheless, including tax-deferred IRA or 401(k) funds in future divorce negotiations is now an option that divorcing couples and their financial planners can use to meet their particular needs in new, creative ways.

Have additional questions? Feel free to Contact Us for more info!

Responsibility and accountability – even for the powerful – are rooted into the core of our legal system. This country’s founders knew that a democracy needs a court system that empowers people to protect themselves by holding the powerful to account. That’s why the Constitution guarantees each person the right to a trial by jury.

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